Smith Douglas Homes (NYSE:SDHC) Cut to "Sell" at Wall Street Zen

Key Points

• Smith Douglas Homes has been downgraded from a "hold" to a "sell" rating by Wall Street Zen, reflecting negative sentiment on the stock's future performance.
• JPMorgan Chase lowered its target price for SDHC from $24.00 to $18.50, while three other firms set their target prices in a similar downward trend, suggesting a challenging outlook for the company.
• Despite the downgrade, 82.71% of SDHC stock is owned by insiders, indicating confidence from management amidst its recent financial struggles.

Wall Street Zen downgraded shares of Smith Douglas Homes (NYSE:SDHC - Free Report) from a hold rating to a sell rating in a report released on Saturday.

SDHC has been the topic of a number of other research reports. Wells Fargo & Company decreased their price objective on Smith Douglas Homes from $21.00 to $20.00 and set an "equal weight" rating on the stock in a research note on Monday, April 14th. Wedbush reaffirmed a "neutral" rating and set a $18.00 price objective on shares of Smith Douglas Homes in a research note on Wednesday, May 14th. JPMorgan Chase & Co. decreased their price objective on Smith Douglas Homes from $24.00 to $18.50 and set a "neutral" rating on the stock in a research note on Wednesday, May 21st. Finally, Royal Bank Of Canada set a $16.00 price objective on Smith Douglas Homes and gave the company a "sector perform" rating in a research note on Tuesday, May 20th. Two analysts have rated the stock with a sell rating and four have given a hold rating to the company's stock. According to data from MarketBeat, the stock presently has a consensus rating of "Hold" and an average target price of $18.90.

Smith Douglas Homes Stock Performance

SDHC stock traded down $0.34 during midday trading on Friday, hitting $18.43. 41,436 shares of the stock were exchanged, compared to its average volume of 62,584. The stock's 50-day moving average price is $19.58 and its 200-day moving average price is $20.15. The stock has a market cap of $947.85 million, a price-to-earnings ratio of 24.20, a PEG ratio of 10.07 and a beta of 1.05. Smith Douglas Homes has a fifty-two week low of $16.28 and a fifty-two week high of $39.50.

Smith Douglas Homes (NYSE:SDHC - Get Free Report) last issued its quarterly earnings data on Wednesday, August 6th. The company reported ($0.13) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.25 by ($0.38). The firm had revenue of $223.92 million for the quarter, compared to analyst estimates of $216.01 million. Smith Douglas Homes had a return on equity of 1.74% and a net margin of 1.43%. Research analysts anticipate that Smith Douglas Homes will post 1.73 EPS for the current year.

Smith Douglas Homes declared that its Board of Directors has initiated a share repurchase program on Wednesday, May 28th that allows the company to repurchase $50.00 million in shares. This repurchase authorization allows the company to repurchase up to 5.1% of its shares through open market purchases. Shares repurchase programs are generally a sign that the company's board of directors believes its stock is undervalued.

Insiders Place Their Bets

In other Smith Douglas Homes news, insider Russell Devendorf bought 3,000 shares of Smith Douglas Homes stock in a transaction dated Wednesday, May 21st. The stock was bought at an average price of $16.80 per share, for a total transaction of $50,400.00. Following the completion of the acquisition, the insider directly owned 299,952 shares of the company's stock, valued at approximately $5,039,193.60. This trade represents a 1.01% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, Director George Ervin Perdue III bought 10,000 shares of Smith Douglas Homes stock in a transaction dated Tuesday, June 3rd. The stock was acquired at an average price of $19.09 per share, with a total value of $190,900.00. Following the acquisition, the director directly owned 24,345 shares of the company's stock, valued at approximately $464,746.05. This represents a 69.71% increase in their ownership of the stock. The disclosure for this purchase can be found here. Over the last 90 days, insiders acquired 40,652 shares of company stock valued at $748,964.

Hedge Funds Weigh In On Smith Douglas Homes

A number of hedge funds have recently modified their holdings of SDHC. M&T Bank Corp increased its stake in shares of Smith Douglas Homes by 8.4% in the first quarter. M&T Bank Corp now owns 11,001 shares of the company's stock worth $215,000 after acquiring an additional 848 shares during the last quarter. Trexquant Investment LP acquired a new stake in shares of Smith Douglas Homes in the fourth quarter valued at about $218,000. PDT Partners LLC lifted its stake in shares of Smith Douglas Homes by 10.7% in the first quarter. PDT Partners LLC now owns 13,988 shares of the company's stock valued at $273,000 after buying an additional 1,349 shares during the period. Victory Capital Management Inc. lifted its stake in shares of Smith Douglas Homes by 80.2% in the first quarter. Victory Capital Management Inc. now owns 14,395 shares of the company's stock valued at $281,000 after buying an additional 6,406 shares during the period. Finally, Corton Capital Inc. lifted its stake in shares of Smith Douglas Homes by 41.0% in the second quarter. Corton Capital Inc. now owns 20,752 shares of the company's stock valued at $403,000 after buying an additional 6,036 shares during the period.

Smith Douglas Homes Company Profile

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp.